From the huge viewing screen at the home stadium of the famous baseball team Hokkaido Nippon-Ham Fighters to the naked-eye 3D animation on the exterior wall of the building located at the famous “crossroads” in Shibuya and Shinjuku, Tokyo, more and more Japanese companies have adopted LED display screens from China.
According to market institutions, China’s LED display application products account for more than 85% of the global market share. In recent years, with the increasing competition in the domestic market, leading Chinese LED display companies such as Leyard, Lianjian Optoelectronics, and Aoto Electronics have turned their attention to overseas to seek broader development space. Japan is one of the important target markets for these companies.
Market share is increasing rapidly
According to industry insiders, there are currently about 20 to 30 Chinese LED display companies doing business in the Japanese market. At the same time, many small and medium-sized LED display manufacturers sell products to Japan through agents, and Chinese companies’ market share in Japan is increasing rapidly.
Analysis of the financial reports of leading companies also shows that the proportion of overseas markets, including the Japanese market, in the overall business of enterprises is increasing.
In 2022, Leyard, which ranks first in the industry in terms of revenue, had overseas revenue of 2.632 billion yuan, a year-on-year increase of 25.63%, and the proportion of overseas revenue of smart display increased from 30.36% to 37.80%.
As a major exporter of LED display screens, Absen’s overseas market is its main business. In 2022, the demand for overseas LED display screens was strong, and the company’s overseas revenue reached 1.761 billion yuan, a year-on-year increase of about 75.82%, accounting for 62.95% of total revenue, which was one of the important factors for Absen to achieve double growth in revenue and net profit. In the first half of 2023, overseas business grew faster, with the Asian market (outside China) growing by 119%.
It is understood that Lianjian Optoelectronics became an exhibitor at Japan’s InterBEE (International Broadcasting and Television Equipment Exhibition) for the first time in 2019, and officially established a Japanese subsidiary in 2022. Ye Dunchao, deputy general manager of Lianjian Optoelectronics Overseas Sales Center, introduced that in recent years, Lianjian Optoelectronics’ revenue in the Japanese market has increased by more than 30% annually, and the proportion of Japanese business in overseas business has reached 15% to 20%. He said frankly that the main competitors in the world’s LED display market are Chinese companies.
In addition, AOTO Electronics and Unilumin Technology both have subsidiaries in Japan, and Ledman Optoelectronics will also set up an office in Japan in 2023 to further develop its business in the Japanese market.
The reporter learned from the investigation that most LED display companies currently use the channel model for overseas sales, signing overseas distributors to build a huge agency sales network, and some leading companies are also gradually cultivating their online and offline overseas direct sales capabilities.
Seeking differentiation in the big trend
Looking forward to the LED display market, COB (Chip-on-Board) integrated packaging technology, Mini/Micro LED display technology, XR virtual shooting and other directions are expected to become new additions. In the fierce market competition, Chinese companies are also constantly iterating technology, upgrading products, accumulating strength in the field of innovation, and enhancing their differentiated competitiveness.
At present, almost all leading LED display companies use COB technology as the main investment direction for research and development. COB technology can integrate multiple LED chips more compactly, so the technology can be used to design and manufacture display screens with smaller pixel pitch, higher resolution, and suitable for close viewing, such as indoor video walls and advertising display screens. At InterBEE 2023 held in Japan in November last year and ISE 2024 (European Professional Audiovisual and System Integration Exhibition) which just ended not long ago, Chinese exhibitors such as Lianjian Optoelectronics and Aoto Electronics all displayed new indoor and outdoor LED display products using COB micro-pitch technology.
Compared with COB technology, MIP packaging (single pixel packaging or integrated LED packaging) technology, which is more suitable for complex designs and small-size displays, has also matured. Leyard, Unilumin Technology, Absen, etc. have all chosen the technical path of COB and MIP packaging methods going hand in hand.
From “huge” to “super small”, Mini/Micro LED display technology is accelerating commercialization. Outdoor large-scale advertising screens are our general understanding of LED display applications. However, with the advancement of technology, Mini/Micro LED is expected to be applied to many consumer electronic product display fields such as TVs, watches, AR glasses, etc. with its advantages of high contrast, wide color gamut, high brightness, low power consumption, long life, and short response time, bringing new output value. The magnitude of growth. According to the Gaogong Industry Research Institute (GGII), the global Micro LED market is expected to exceed US$10 billion by 2027. At InterBEE 2023 in Japan, Aoto Electronics displayed a magazine-sized P0.3 Micro LED product, which presented delicate picture quality and bright colors, attracting many visitors.
Naked-eye 3D large screens have become a beautiful landscape in the field of commercial display. In recent years, many naked-eye 3D large screens at home and abroad have become popular check-in points and tourist landmarks. Lianjian Optoelectronics has presented many works and cases such as Chengdu Taikoo Li with its content creation capabilities and naked-eye 3D arc display algorithms. Naked-eye 3D has become one of its representative businesses. By the end of 2022, Lianjian Optoelectronics has built more than 30 naked-eye 3D large screens in more than 20 cities at home and abroad.
XR virtual studio brings changes to the way film and television production is produced. Many scenes in the popular Korean drama “Dark Glory” are not shot in real scenes, but are presented on the screen using XR virtual studios. In many cases, the actors are just in front of the scenes displayed on the LED display instead of in real scenes. XR virtual studios have the advantages of reducing shooting costs, shortening shooting production cycles, and improving film shooting quality, which has accelerated the growth of market demand. In addition to being used for filming movies and advertising, XR virtual studios can also be used in online corporate activities, press conferences, etc. Companies such as Lianjian Optoelectronics and Aoto Electronics have already made layouts and explorations in this field.
Market analysis agency TrendForce predicts that the global market size of XR virtual shooting display screens will reach 560 million, 760 million, and 980 million US dollars from 2023 to 2025, respectively, an increase of 40%, 35%, and 30%, respectively, which will drive the market demand for LED display screens.
LED movie screens may subvert traditional big screens in the future. Compared with the traditional projection + screen projection method, LED movie screens have huge advantages in technical indicators such as display brightness, contrast, color gamut, and ultra-high definition, which can achieve more three-dimensional, more realistic, fuller details, and stronger presence image performance.
In 2023, the domestically produced 10-meter LED movie screen (HeyLED) independently developed by Shenzhen Times Huaying Technology Co., Ltd. officially entered a theater in Los Angeles, USA after passing the inspection and certification of the Hollywood Digital Cinema Initiative (DCI), realizing the export of Chinese LED movie screens for the first time. After overcoming difficulties such as technology, stability, replacement costs and industry interest interference, LED movie screens are expected to set off a visual revolution in theaters and become a new engine for industry growth.
Explore more market opportunities
Japan’s business is very developed, and there is still a lot of room for improvement in the penetration rate of LED display screens in various application scenarios. It is based on this that Chinese LED display screen companies generally regard the Japanese market as one of their core overseas markets.
One of the opportunities is the digital upgrade of scenes such as advertising and corporate business. Ye Dunchao, deputy general manager of Lianjian Optoelectronics Overseas Sales Center, said that there are many advertising screens in Japan, but it is estimated that 80% to 90% are still traditional signs rather than digital advertising, and there is huge potential for upgrading and replacement in the future. At the same time, Japan is also the headquarters of many large companies, and there is also a very large market space in the field of corporate exhibition halls and conference applications.
The second opportunity is that the digital transformation (DX) and green transformation (GX) led by the Japanese government will bring more application scenarios. Compared with its economic development, Japan’s e-government and enterprise digital development are relatively backward. In many fields, traditional means such as paper media, telephone and fax are still used, which aggravates the labor shortage and restricts the improvement of labor productivity.
Therefore, the Japanese government supports and advocates digital transformation and green transformation. In the future, LED display and its AIoT (artificial intelligence Internet of Things) applications will be indispensable in many scenarios such as urban management, Industry 4.0, energy conservation and environmental protection.
The third opportunity is that Japan has a developed cultural and entertainment industry, and there are many application scenarios for LED technology. Japan has many performance venues, such as theaters and stadiums, which provide huge demand for stage LED screen rental and fixed installation. At the same time, Japan has many art galleries, museums, theme parks and leisure and entertainment centers, which provide growth points for LED amusement systems and digital entertainment experiences.
For example, TeamLab, which uses advanced scientific and technological means such as projection technology, sound and light technology, and digital interactive technology to create digital media art, is a Japanese company. Its works use a lot of LED lighting and display technology.
In addition, Japan’s animation, film and television and other film and television production industries are developed, and related fields have high demand for solutions such as LED display and XR virtual shooting. Aoto Electronics is eyeing this field and is actively developing the Japanese XR market in cooperation with overseas film and television equipment manufacturers.
In addition, Japan has many sports events and exhibitions, which also provide a lot of opportunities for LED display companies. Japan ranks first in the world in the number of major sports events and international exhibitions held each year. Osaka will also host the World Expo in 2025, which will boost the market demand for LED displays to a certain extent.